Wynn Could Fetch $1 Billion in Vegas Land Sale, Says Analyst

• Company hasn’t said Las Vegas land is for sale
• Property was highlighted on recent earnings call
• Analyst says it could be a “prudent” move

Should Wynn Resorts (NASDAQ: WYNN) opt to sell its currently undeveloped 38 acres of Las Vegas Strip land, it could command a price tag as high as $1 billion.

That estimate is courtesy of Morningstar analyst Dan Wasiolek, who in a report out Monday, noted that Wynn could eventually sell its unused Sin City real estate and use the proceeds to focus on growth opportunities outside the US, including Macau where its Wynn Macau arm runs two integrated resorts.

Ultimately, we think Wynn could sell this undeveloped land for around $1 billion and allocate that capital toward debt repayments and international regions, which we would see as prudent,” wrote Wasiolek.

Prior to the coronavirus pandemic, Wynn signaled interest in developing the unused Las Vegas acreage, but those plans were halted amid the global health crisis. The gaming company hasn’t said it’s mulling a sale of that land and on its first-quarter conference call, CEO Craig Billings said “we have a land bank in Las Vegas.” If Wasiolek’s estimate is accurate and Wynn sells that property for $1 billion, that works out to be $26.31 million per acre.

Wynn Could Have Reasons to Sell Las Vegas Sand

In a March interview with CNBC’s Jim Cramer, Billings said Wynn could tap its substantial Las Vegas land bank to eventually add another gaming venue in its home market, though such plans don’t appear imminent. The CEO said that Wynn is “simultaneously” thinking about how to best deploy capital in Las Vegas, Thailand, and the UAE.

“Still, the supply/demand dynamic in Las Vegas leads to low ROICs, supporting our view that the region lacks a competitive moat,” said the Morningstar analyst.

He also points out that low barriers to entry in Las Vegas — rivals can somewhat easily enter the market — could make further development in the city unattractive to Wynn, particularly when accounting for the importance of Macau, the operator’s commitment to the United Arab Emirates (UAE), and potential opportunities in Thailand.

Fertitta Factor

Wasiolek didn’t mention Tilman Fertitta, Wynn’s largest shareholder in his report. Nor has Fertitta, now the US ambassador to Italy, publicly mentioned a desire to push Wynn to sell its unused Las Vegas property.

“We see Wynn’s shareholder distribution as appropriate, as we expect the company to focus on improving its balance sheet position and reinvesting in its business to remain competitive,” concludes Wasiolek. “The company’s dividend and share-repurchase activity has been measured, and we expect that to continue during the next 10 years, with dividends averaging 30% of earnings starting in 2026 and share repurchases averaging $200 million in 2025-26, followed by $500 million in 2027-29.”